NASCIO Conference Spotlights State IT Innovation and Change

State CIOs showcase innovation.

Government and innovation. Many would argue the two don't go together. But on the final day of NASCIO's midyear conference in Chantilly, Va., representatives from four states presented strong evidence that innovation is alive and well in the public sector.

Against a backdrop of plunging revenue in a number of states and a rising tide of challenges, ranging from health care costs to decreasing competitiveness, current and former IT executives from Missouri, Colorado, Pennsylvania and the District of Columbia highlighted different aspects of innovation in state IT programs.

In Missouri, a consolidation drive, led by CIO Dan Ross, had resulted in a massive overhaul of how information is now shared among 14 executive departments. The effort, not without its problems and challenges, has brought both benefits and a better understanding of the criteria for fostering innovation in government, according to William Bott, Missouri's deputy CIO for operations.

"We learned four valuable lessons from this project," said Bott. "First of all, you've got to know your customers, whether they are citizens, the legislative branch, agency workers and even the governor. They all had a different view of what consolidation would be about," he explained. "You have to know their expectations."

"Second, sell the thrill of the drive," he continued. Car dealers don't sell a car based on the type of wheels it has. Nor should an IT department try to sell consolidation based on components. "Instead, we focused on outcomes first and then talked about how we were going to get there," he said. Third, let measurements do your marketing. "We all know we are adding value, but you have to show the legislature movement [through quantifiable outcomes], if you want to get the money," he said.

Finally, Bott contradicted the common wisdom of going after low-hanging fruit to score victories in government IT. " We decided to tackle the biggest things first. We let the small stuff take care of itself. Big impact equals big momentum."

In Pennsylvania, the challenge was implementation of a statewide ERP system that included financials and procurement. Dubbed Imagine PA, former project director Don Edmiston, now a consultant with BearingPoint, described the project that changed the state's mission. "This project wasn't about ROI," he said. And yet, by tapping the private sector to help with the business process management and integration issues, the ERP [enterprise resource planning] project, completed in 2004, is reaping sweeping benefits that include lower overall operation costs for Pennsylvania. "Unlike many other states, Pennsylvania will have a surplus," he pointed out.

The key challenges lay with change management involving the workers whose jobs would be affected by ERP. Innovation lay in how the state worked with the various parties, including the public sector unions, to ensure workers understood fully what was happening. The second innovation came from the core team of staff who saw the project through to completion. We did everything we could, including the use of financial incentives, to keep the best people on the team throughout the project, explained Edmiston.

Colorado, like Missouri is tackling enterprisewide consolidation to generate efficiencies and value with its IT investments. Ron Huston, CIO for the state's Department of Human Services, explained how state CIO Michael Locatis, working with Gov. Bill Ritter, has laid the groundwork for what could be groundbreaking legislation that will ensure IT has a seat at the table regarding policy agendas for years to come.

The innovative legislation (now on the governor's desk awaiting his signature), came about much as Missouri's consolidation and Pennsylvania's ERP effort did: through extensive preparation and a heavy emphasis on communications to ensure everybody's questions were answered promptly and

fully. "One of the big fears when a consolidation occurs is how do we get all the people involved?" said Huston. "We can figure out the technology and we can figure out the process changes. But understanding the impact [of consolidation] on people is so important."

For Vivek Kundra, CTO for the District of Columbia, the wakeup call to innovate came when he evaluated the desperate situation of the city's education system, where the high school graduation rate barely passes 50 percent, a multimillion dollar PeopleSoft implementation had failed and technology didn't reach the classrooms despite the fact that dozens of brand new PCs sat in boxes in the school district's warehouse.

Kundra decided to apply to the city's IT projects, the same expectations and metrics that the nation's stock market applies to company stocks. Brokers buy the stocks of companies where the value is increasing, hold the stocks from those firms, where the value is unclear and sell the stocks of those companies where failure is imminent.

"The approach has fundamentally changed how we spend money on IT in the city," he said. "We now buy, sell, or hold 'stocks' in city IT projects, based on a number of criteria, including what we call the 'happiness factor,' which is based on users' satisfaction with the system." Kundra explained that his office uses mathematical models to measure the performance of every IT "stock" project under way. "We use the model for creating an even playing field for new projects coming in and for getting rid of old projects that don't perform."

According to Kundra, those projects that perform get fresh capital, those that don't are dumped; they no longer receive funding. "The stock market approach has helped make government more accountable," he said.